Herman Cain campaign’s financial ties to Wisconsin charity questioned

October 31, 2011

Republican presidential hopeful Herman Cain, hit with a barrage of questions Monday about allegations of sexual harassment, also faced new questions about financial ties between his campaign and a private charity run by two of his top aides.

Citing internal financial documents, the Milwaukee Journal Sentinel reported that a Wisconsin tax-exempt charity called Prosperity USA footed the bill for about $40,000 worth of iPads, chartered airplanes and other expenses as Cain’s campaign got off the ground early this year.

Expenses totaling $37,372 are listed in the group’s financial records as “due from FOH,” or Friends of Herman Cain, the name of his campaign committee, the newspaper said. It is not clear whether Cain repaid the alleged debts, which are not listed in his personal or campaign disclosures.

Such payments are forbidden under federal tax and election laws, because nonprofit charities are not allowed to donate money or services to political campaigns, according to election law experts.

“It looks like a law school exam on potential campaign finance violations,” said Lawrence H. Norton of Womble Carlyle, a former general counsel at the Federal Election Commission. “Many of these payments would be prohibited contributions under federal election law.”

Cain told Fox News Channel that neither he nor his staff was aware of the allegations. “I didn’t even know about the report until you brought it up on the show,” he said.

Prosperity USA was founded by Mark Block, Cain’s chief of staff, and Linda Hansen, his deputy chief of staff. Block launched Prosperity USA and a related group after he headed the state chapter of Americans for Prosperity (AFP), a tea-party-aligned organization based in Washington.

AFP, which did not respond to a request for comment Monday, told the Milwaukee newspaper that it had no ties to Block’s group. Block said the Cain campaign has “asked outside counsel to investigate” the financial claims.

The questions came amid an uproar over a Politico report that one of Cain’s former employers, the National Restaurant Association, agreed to a financial settlement with two female employees who accused him of sexual harassment. Cain called the allegations “totally baseless and totally false.”

After Cain began taking donations for his campagn in January, Prosperity USA paid $15,000 for a trip to Atlanta, $17,000 for chartered plane flights, and $5,000 for travel and meeting costs in Iowa, Las Vegas, Houston, Dallas and Louisiana, according to bank records cited by the Journal Sentinel. The newspaper also said the Cain campaign was billed $3,700 for iPads purchased Jan. 4.

Records also appear to show a $100,000 payment to the Congress of Racial Equality, a conservative black group, shortly before Cain spoke at a group event, the newspaper said. The expense was apparently covered by $150,000 in loans to Prosperity USA from unidentified supporters.

Staff researcher Lucy Shackelford contributed to this report.

Deputy editor, National politics
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